Is the light at the end of the private renter’s tunnel really in sight?

For years, Advice for Renters has been developing ideas for how the experience of renting could be transformed. 

We concluded that this could only be done by ensuring that landlords are only allowed to let homes that are safe and well manged.

We have been talking more about this since the Government promised to bring in new legislation through a Renters’ Reform Act. Progress with this change in the law has been slow to start.  Despite this being in the Government’s manifesto in 2019, and confirmed in the Queen’s Speech at the opening of parliament, nothing concrete emerged, until…

On 2 February 2022 the Government published its proposals for a Levelling Up Strategy which includes reference to the Decent Homes Standard and promises to consult about a National Register of landlords.  As both these are key elements of A4R’s own model for improving conditions for renters, we wrote to the Minster responsible, Michael Gove, to explain how we think a new system should work.

Here is the letter we sent to the Minister:

2 February 2022

Rt Hon Michael Gove MP
Secretary of State
Department for Levelling Up, Housing and Communities
2 Marsham Street
London
SW1P 4DF

Dear Secretary of State

Levelling Up Strategy – housing standards in rented homes

Advice for Renters was set up in 1986 and remains the only specialist legal advice agency dedicated to the needs of private renters.

We welcome your fundamental reappraisal of standards in rented accommodation and how these can be met. It also offers an opportunity to apply the same requirements across the whole of the rented sector.

We recognise that the changes would need to be introduced incrementally, and given a chance to bed in, so we would propose that new (or more accurately streamlined) regulatory requirements focus solely on the private rented sector until these are running smoothly and effectively.  There could then be a review to determine whether social landlords should be required to demonstrate compliance through the same system.

The Decent Homes Standard and legal requirements for letting

To be effective, compliance with the Decent Homes Standard must be evidenced. The best way to achieve this is for landlords to provide a Surveyor’s Report to confirm whether each property meets the DHS.  If this becomes a legal requirement a new branch of surveyors specialising in the DHS will emerge and costs will not be prohibitive.  The surveyors might be asked to confirm compliance with the relevant legal requirements for the type and location of each property.  Alternatively, these could be submitted individually by the issuing authority. For ease of reference, the current legal requirements are,

·         Buildings insurance

·         Gas Safe certificate

·         Energy Performance Certificate

·         Safety Report (solid fuel/oil)

·         Electrical Installation Condition Report

·         Air Conditioning check

·         Working Smoke Alarms on each floor (and date of last test)

·         BS compliant carbon monoxide alarm (and date of last test)

·         PAT test

·         Legionnaire Risk Assessment

·         Radon Risk Assessment

·         Room sizes meet or exceed legal standards for habitable rooms

·         For HMOs, compliance with current HMO regulations

The period for evidencing renewal of the above would be consistent with the current requirements for each.

In addition to the property standard, and in order to ensure that this standard is maintained, landlords should be required to provide evidence of competent management. Evidence should comprise,

·         A named agent which is accredited by a relevant regulatory body, and confirmation that this agent is managing the property on behalf of the landlord, or

·         Training undertaken and passed under test conditions for self-managing landlords

It would be appropriate for the Government to put in place the proposals recommended by the Regulation of Property Agents (RoPA) Working Group commissioned by your Department which reported in 2019.  This would then become the regulatory body referred to above.

A National Register of landlords

The simplest and most cost effective means of ensuring compliance with both property standards and management competence will be through a National Landlords Register.

This would be analogous to the current DVLA registration. The technology required for online registration could be adapted using that model, since it mirrors the requirements for evidence that road vehicles comply with safety requirements and are adequately insured and that the drivers are competent.

Once registered, landlords and agents would be required to enter the Registration Number on all legal documents, including Tenancy Agreements, s.13 Notices and Notices of Seeking Possession.

From a well-publicised date, after which it would be unlawful to let an unregistered dwelling, any such documents which did not contain the Registration Number would be invalid.

The regulatory model

Advice for Renters have spent many years developing the regulatory model set out above, which is informed by our long experience (over 30 years) of advising private tenants living in unsatisfactory accommodation.   In that period, we have monitored the impact of local authority powers and duties to enforce the Fitness Standard (up to 2006), the Housing Health and Safety Rating System (from 2006) and the various forms of property licensing since 2006.  All of these have had limited effect, due mainly to the fact that they are very resource intensive for local authorities to operate. As a result, most have barely scratched the surface of the problem of poor conditions, particularly at the bottom end of the market occupied by the most vulnerable renters.

We have also worked closely with The Lettings Industry Council as they developed a very similar MOT model.

Cost effectiveness

While the regulatory model would require initial investment, we believe that it will show itself to be very cost effective, both for central and local government and for landlords and agents themselves.

This is because, once the system is working fully, registration through the National Landlords Register would become a mandatory pre-requisite for letting.  The large number of registrations, relative to the cost of running the Register, would allow registration fees to be set at a much lower level that current property licence fees.

The Register would remove most responsibilities under the current system for inspection and enforcement by local authorities.  Ultimately, it would also enable the phasing out of property licensing, which is confusing, inconsistent, expensive for landlords and in most areas, ineffective. 

Instead, local authorities would have a duty to identify the diminishing number of landlords who continued to let unregistered dwellings.  Initially they would advise landlords to register within a certain time period. From the date on which registration became a pre-requisite for letting, local authorities would be expected to prosecute and/or issue Penalty Notices. They would also have a duty to prosecute the very small number of landlords who obtained registration by fraudulent means.

Indirect savings would also accrue to other public bodies, most notably the NHS, due to the reduction in property-related ill health. Important but harder to quantify savings would result from, for example, higher educational attainment for students living in homes conducive to study, and to the benefits system, as those living in decent homes are more likely to be fit for work.

A new Communications System

In addition to the effectiveness and cost effectiveness of the National Landlords Register, it would also provide a vital and reliable means for central and local government to communicate with landlords and agents.  This will enable landlords to become aware of any changes in requirements and receive guidance on these. Most importantly, they would be made aware of the requirements for homes to be more energy efficient, as well as grants and other financial help that may be available for upgrades.

Bearing in mind our long experience of the private rented sector, and the amount of thought we have given, over many years, to the most effective form of regulating the sector, we very much hope that you will allow us the opportunity to contribute further as your Department develops its proposals.

Yours sincerely,

Jacky Peacock, OBE

Head of Policy

Advice for Renters

CC: Eddie Hughes MP, Parliamentary-Under-Secretary, Department for Levelling Up, Housing and Communities